FEATURE: Energy Storage Market Growth Outpaces Its Peers
Energy storage has become increasingly favored by investors as seen in the fact that for the first time in late 2016, venture capitalists pulled money away from other markets to fund a variety of storage-related companies. At the same time established global manufacturers expanded their commitments to battery technologies while increasing production capacity.
Whether to ‘save’ energy generated by photovoltaic (PV) cells or to rebalance the overall electrical grid, energy storage is hot. According to a released recently report by Mercom Capital Group, 3Q 2016 energy investors are putting money into storage at such a pace that other investment opportunities may go begging by comparison.
Smart grid, battery and energy efficiency companies raised $102 million (USD) in venture capital (VC) funding last quarter, according to Mercom’s report, while battery storage systems saw a boom more than six times greater, reaching $625 million during the same period.
While battery and storage solution companies are seeing a mini-boom courtesy of financiers, smart grid company funding ‘collapsed’ in comparison—collecting just $11 million in seven deals in the third quarter of 2016, the lowest amount of such funding in one quarter since Mercom began tracking the activity. In 2Q 2016, $222 million went into 15 deals. In a year-over-year (YoY) comparison, $81 million went into 12 deals in 3Q 2015. There were just seven VC investors that participated in smart grid deals in 3Q 2016, compared to 46 in 2Q 2016, with eight M&A transactions compared to three a year ago.
What sort of energy storage projects are making headlines? Most are based on novel technologies and emerging R&D. While venture capitalists were lining up to support storage startups, mainstream manufacturers as well as renewable energy stars like Tesla were not sitting idle. Tesla Energy (Palo Alto, California) expanded its Giga Factory battery plant with a Panasonic partnership. Tesla has also increased the production capacity of PowerWall stationary residential storage while doubling cells in its Powerpack for industrial requirements. The company is anticipating that 2016 battery sales could be as much as 60 percent larger than the entire US 'behind-the-meter' energy storage market was sized in 2015, according to analysis released by GTM Research. GTM estimates that Tesla will sell 168.5 megawatt-hours of energy storage systems to SolarCity in 2016, which is more than six times what Tesla sold to SolarCity in 2015. If the forecast becomes reality the sales surge would make Tesla the leading stationary battery supplier in the US.
The quest for more and better batteries is also exemplified by Mercedes-Benz Energy, which is expanding its Accumotive business in Kamenz, Germany by at least (USD) $500 million. Mercedes is typically coy about its end game, but company spokespeople said the expansion will support stationary energy storage products as well as 10 new electric vehicle (EV) models.
Now that Tesla and one of the world’s most established (and conservative) automobile makers are upping their investments in energy storage and EV batteries, where else is the market growing? Like with many tech companies, the stage for rapid commercialization is being set by advanced research and development programs.
Scrappy new storage solutions
A team at Vanderbilt University (Nashville, Tennessee) has created the world's first steel-brass battery made from junkyard metal scraps. The new test cells can store energy at levels comparable to lead-acid batteries while charging and discharging at rates comparable to ultra-fast super capacitors.
The Vanderbilt team found that the key is anodization, a common chemical treatment the gives aluminum a durable as well as decorative finish. When scraps of waste steel and brass are recovered and anodized using a common household chemical and residential-level electrical current, it was found that the metal surfaces are restructured into nanometer-sized networks of metal oxide that can store and release energy when reacting with a water-based liquid electrolyte with performance at least comparable to conventional lead-acid batteries.
Growing capacity by 50%
The Energy Research Centre of the Netherlands (ECN) has developed technology that it claims is capable of increasing the storage capacity of rechargeable batteries by 50 percent. A spin-off company, LeydenJar Technologies, has been formed to commercialise the invention. The technology replaces the conventional graphite anode (of a lithium-ion cell) with a pure silicon anode, increasing the storage capacity of this component of the lithium-ion battery by a factor of ten and the storage capacity of the entire battery up to 50 percent. To overcome the problem of silicon expanding as much as three times when a high level electrical charge is applied, the ECN applies the silicon in columns onto copper foil using a plasma-based nanotechnology, thus creating enough space for expansion and allowing the battery to remain stable.
DOE backs 2 new battery technologies
After four years of evaluation, the Department of Energy (DOE) Joint Center for Energy Storage Research (Chicago, IL) is backing two new key technologies for future battery systems. When scaled to commercial production, the batteries are believed to be capable of delivering five times the energy density at one-fifth the cost of commercial batteries available in 2011.
The Center has investigated 1,500 compounds for electrodes and 21,000 organic molecules relevant for liquid electrolytes as well as filing 52 invention disclosures and 27 patent applications, says director George Crabtree. The goal was to evaluate the best pathways for beyond-lithium-ion systems to reach 400 watt hours per kilogram (400 Wh/kg) and $100 per kilowatt hour ($100/kWh).
To achieve their goals, researchers have developed an organic ‘redox flow’ battery consisting of two energy-dense liquids that store and release charge as they flow through the battery and undergo reduction and oxidation (redox) reactions. The design replaces the solid electrodes in conventional lithium-ion batteries with energy-dense organic liquids that charge and discharge as they flow through the battery. The organic molecules in these redox flow batteries are highly versatile and can be tailored to store large amounts of energy inexpensively, a key requirement for the grid.
Cheaper energy storage
A team of researchers based at the US Department of Energy’s Pacific Northwest National Laboratory (Richland, WA) have discovered a rechargeable zinc-manganese battery that is as inexpensive as conventional car batteries, but provides a much higher energy density. “The idea of a rechargeable zinc-manganese battery isn’t new," explained PNNL Laboratory Fellow Jun Liu, the paper’s corresponding author. But legacy concepts created batteries that usually stopped working after just a few charges, he added. A lifetime so short it made the original concept impractical occurs because manganese from the battery’s positive electrode begins to slough-off, making the battery’s active material inaccessible for energy storage. Researchers found after adding manganese ions to the electrolyte in a new test battery, it was able to reach a storage capacity of 285 mA-hours per gram of manganese oxide over 5,000 cycles, while retaining 92 percent of its initial storage capacity.
Energy storage remains an exciting, emerging market for investors, researchers, and manufacturers. New technologies are proving that conventional batteries such as lead-acid (which now dominates storage markets,) and lithium-ion will have both company and competition in the evolving global energy storage market.